The price of state-owned liquefied petroleum gas (LPG) has been increased by more than double, bringing it almost in line with that of private companies. The price of a 12.5-kg cylinder has been raised from Tk 776.93 to Tk 1,860. The new price will take effect after 8:00 pm, according to the Bangladesh Energy Regulatory Commission (BERC).

Previously, government-supplied LPG sourced from domestic fields was significantly cheaper than that sold by private companies under BERC’s pricing formula. Under the revised pricing structure, a portion of the additional revenue will be deposited into the LPG Sector Development Fund.

According to BERC’s pricing formula, Tk 1,004.07 from the sale of each 12.5-kg cylinder will be deposited into the LPG Sector Development Fund. The order also directs the opening of a separate bank account for this purpose. As a result, state-owned LP Gas Limited will receive a slightly higher amount than before.

A public hearing on LPG pricing was held on October 29. During the hearing, concerns were raised that the significant price gap between government and private LPG was creating opportunities for black-market trading and artificial shortages. While a 12-kg cylinder of private LPG was selling for Tk 1,837, the price of a 12.5-kg government cylinder stood at just Tk 776.93.

BERC’s technical committee, as well as consumers, proposed aligning government and private LPG prices. However, following the hearing, state-owned LP Gas Limited raised objections. The company proposed keeping its price slightly below that of private operators to remain competitive in the market.

LP Gas Limited had long been opposing the previously fixed price set by BERC. In 2025, the company applied for an increase in the price of a 12.5-kg cylinder from Tk 776.93 to Tk 925.

Previously, private LPG companies were free to set their own prices. Following a writ petition filed by the Consumers Association of Bangladesh (CAB), BERC began regulating LPG prices on April 12, 2021. As nearly 99 percent of LPG is imported, the commission decided to use Saudi Aramco’s Contract Price (CP) as the benchmark for determining prices. Changes in the CP would lead to adjustments in the base price, while other commission components would remain unchanged. Since then, BERC has been announcing private LPG prices every month.

At the time, it was explained that although private companies imported LPG at higher costs, state-owned LP Gas Limited obtained LPG as a by-product from domestic gas fields at a comparatively lower cost. Therefore, the company’s prices were determined under BERC’s ‘no profit, no loss’ principle. The price of a 12.5-kg cylinder was then set at Tk 690. Later, on May 4, 2025, the price was increased without a public hearing.

The then BERC chairman said the pricing of government LPG involved several parameters, which had changed, prompting the adjustment. He said government LPG prices were revised in the same way as private LPG prices, which are adjusted monthly. He also noted that there had been a previous instance of government LPG prices being adjusted without a public hearing.

According to the annual report of LP Gas Limited, the company sold 12,723 metric tonnes of LPG in the 2023-24 fiscal year. Of this amount, 834 metric tonnes were supplied in bulk, including 722 metric tonnes to the Bangladesh Army. The remaining LPG was bottled and sold by the company.

In the same fiscal year, the company reported a pre-tax profit of Tk 10.02 crore. After depositing Tk 50 lakh as Workers’ Profit Participation Fund (WPPF) and paying Tk 3.12 crore in income tax, its net profit stood at Tk 6.39 crore.